Trump Media (DJT) is trading at less than 50% of its all-time-high. Where is it going next? We look at two views on the subject.
In a March 29 article, Money.it noted that former U.S. president Donald Trump’s Trump Media was likely to see a slide in its stock price, if only from the equity being valued at over 2,000 times earnings. Thus far, the equity, trading under DJT, has performed as expected, and is now valued at only 1,000 times. The price has dropped by over 50% from its maximum.
What are analysts saying about the stock, and who is buying DJT now? Let’s take a look.
The current state
DJT hit an all-time-high of 71.930 on March 27. Since then it has shown a downward trend. The stock had closed on April 11 at 32.410 and was still falling throughout April 12. Media sources note that the stock did fall below 30 during trading on the 12th.
“Get out now”
John Tobey, writing in Forbes, recommends a quick exit. His reasons include some frightening points. Along with shareholder disarray, the risk of a serious stock dilution comes from not one but two directions. First, there is a million-share conversion of convertible securities and contracts that is ongoing. Then, there is a ‘bonus’ share issuance totaling 40 million shares if
if the stock stays above $17.50 for 20 of 30 days. There are 12 days to go on that one.
Technically, there was a support at $35, which failed this week. The stock has a book value (price/net worth) under $2. As far as Tobey is concerned, it is time to beat the crowd to the door.
A contrarian attempt
Louis Navellier, writing in Investor Place, tries to make a contrarian argument for reconsidering DJT. He claims that part of the reason to buy the stock is precisely because of the negative sentiment. A ‘bold contrarian’ move should be considered in this case.
He points out that conservative social media users essentially do not have a home. If Truth Social were to gain more of these users as they become increasingly dissatisfied with other platforms, the stock could gain substantially from it.
Navellier largely stays away from the political, but even he recognizes that an ascendent Trump could become a more effective selling point than anything else.
Overall, he points to the fact that the consensus is overwhelmingly against the stock, and when the scales are tipped so drastically to one side, the other side can end up winning. His example? Trump’s 2016 presidential run.
